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Infringement Action Dismissed for Lack of Standing Based on Assignment Covering ''Unrelated'' Tire Pressure Monitoring Patents

Wednesday, August 24, 2011
MHL Tek, LLC v. Nissan Motor Co., Nos. 10-01317, -01318, 2011 BL 206174 (Fed. Cir. Aug. 10, 2011) The U.S. Court of Appeals for the Federal Circuit affirmed a district court decision dismissing an action for infringement of two patents for lack of standing and vacated summary judgment of noninfringement of a third patent belonging to a different family, finding an assignment covered all three patents directed to the monitoring of tire pressure.

Assignments of Tire Pressure Monitoring Patents

The appeal arises from an infringement suit concerning three patents relating to tire pressure monitoring technology: U.S. Patent Nos. 5,663,496 (the '496 patent), 5,741,966 (the '966 patent), and 5,731,516 (the '516 patent). The '496 and '966 patents are divisionals of U.S. Patent Application No. 08/101,379 (the '379 application), and the '516 patent belongs to a different patent family. On August 5, 1993, two days after filing the '379 application, the inventors assigned the application to Animatronics, Inc. In November 1993, Animatronics assigned the entire right to the "inventions and discoveries" in the '379 application to McLaughlin Electronics ("McLaughlin"). The McLaughlin assignment contained a "carve out" provision which retained Animatronics' rights to the '379 application that "concern" certain "proprietary inventions," allowing Animatronics to make, use, and sell products other than tire pressure monitoring systems. MHL Tek at 10. On June 7 and July 6, 2007, the inventors purportedly assigned the patents in suit to MHL Tek, LLC ("MHL Tek"). On July 13, 2007, MHL Tek brought suit in the U.S. District Court for the Eastern District of Texas against numerous automobile manufacturers, alleging infringement of the patents in suit. Animatronics assigned the rights to the patents in suit to MHL Tek in November 2007. The district court dismissed MHL Tek's claims concerning the '496 and '966 patents for lack of standing, finding that Animatronics had assigned its rights to McLaughlin in November 1993. Further, the district court found that the '496 and '966 patents were directed to tire pressure monitoring systems, and, therefore, not subject to the carve out provision. The district court denied the defendants' motion to dismiss MHL Tek's claim for infringement of the '516 patent for lack of standing, holding that the McLaughlin Assignment only assigned patents related to the '379 application. Based on its construction of the term "cylindraceous housing," recited in claim 1 of the '516 patent, the district court, however, held that the accused products did not infringe either literally or under the doctrine of equivalents.

Lack of Standing Based on Assignment of Tire Pressure Monitoring "Inventions and Discoveries"

The Federal Circuit affirmed the dismissal of the '496 and '966 patents for lack of standing. On appeal, MHL Tek did not dispute that the claims of the '496 and '966 patents were "inventions and discoveries" set forth in the '379 application pursuant to the McLaughlin assignment. MHL Tek asserted, however, that the '496 and '966 patents were not assigned to McLaughlin because they were subject to the carve out provision. Comparing the limitations of the claims of the '496 and '966 patents to the "proprietary inventions" defined in the McLaughlin assignment, the Federal Circuit determined that although there was some overlap of components, the claims did not cover the scope of the proprietary inventions, and, thus were not subject to the carve out provision. Finding that the '496 and '966 patents were assigned to McLaughlin, the Federal Circuit affirmed the district court's decision that MHL Tek lacked standing to assert the '946 and '966 patents. The Federal Circuit further reversed the grant of summary judgment of noninfringement, finding that MHL Tek also lacked standing to assert the '516 patent. Reviewing the assignments to Animatronics and McLaughlin, the Federal Circuit concluded that the plain language assigning the "inventions and discoveries" disclosed in the '379 application did not narrowly limit the assignment to patents or applications related to the '379 application. The court stated that the ultimate determination of whether the '516 patent was assigned to Animatronics and then to McLaughlin rested on whether the patent claimed "inventions and discoveries" that were described in the '379 application. Essentially conducting a written description analysis, the Federal Circuit determined that the '379 application disclosed each limitation of claim 1 of the '516 patent. Further, the court found that the inventions claimed in the '516 patent were not subject to the carve out provision. The Federal Circuit noted that while some claimed elements "concern[ed]" certain proprietary inventions, "[i]t would be contrary to the language of the assignment to decide that something with fewer than these components is the same thing as the system itself." MHL Tek at 22. Concluding that the entire '516 patent was covered by the assignments, the Federal Circuit held that the patent was ultimately assigned to McLaughlin, and, therefore, MHL Tek lacked standing to assert infringement. Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy. ©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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